The CIFTIS empowers the non-public economy. Photo: Liu Yue/CSST

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Fair competition is at the core of a socialist market economy, and strengthening fair competition is a key guarantee for building a unified, open, and high-standard market system. At present, the accelerated construction of a new development pattern and the need for high-quality economic development have presented increasingly stringent requirements for equitable development and fair competition among enterprises. 

In recent years, China has enacted various laws and regulations, including the Anti-monopoly Law of the People’s Republic of China and the Law of the People’s Republic of China on the Promotion of Small and Medium-sized Enterprises (SMEs). These efforts have significantly improved the business environment and fostered equitable development and fair competition across all types of enterprises. Since the 18th National Congress of the Communist Party of China in 2012, the proportion of the non-public economy in China has increased from less than 40% to about 60%. Nevertheless, there is still room for improvements in the equitable development and fair competition of Chinese enterprises.

 

Public services 

Promoting equitable development and fair competition among various types of enterprises requires an analysis from the micro perspective of each individual enterprise. Enterprises function as both producers and sellers, and their survival and growth depend on their ability to expand the market, reduce production costs, and achieve high profits. To ensure equitable development and fair competition in the future, it is necessary to establish institutional mechanisms and policy systems that guanrantee market expansion and cost reduction for various types of enterprises. 

While most discussions on improving the development environment for non-public enterprises focus on excessive government intervention, there is insufficient attention given to inadequate public services provided by the government, particularly for SMEs. In fact, this is also one of the fundamental obstacles that hinder fair competition and equitable development among enterprises.

Firstly, the existing administrative service system has significantly increased the institutional transaction costs of non-public enterprises, especially SMEs. 

Secondly, according to research and investigation on enterprises, non-public enterprises require services such as obtaining and interpreting preferential policies, channels for providing feedback on difficulties, communicating with the government, and connecting with the market. These services are mostly tailored to individual needs.  However, the development of service systems between the government and enterprises has been relatively slow, resulting in an ineffective bridging of the gap between the two. 

Thirdly, the role of digital technology is relatively limited. Non-public enterprises, especially SMEs, still lack the ability to screen and interpret information. Meanwhile, enterprises cannot fully rely on existing information platforms to meet their needs for financing alignments, training services, and technological innovation alignments.

 

Common development  

To promote equitable development and fair competition among enterprises, it is crucial to address the issues of non-neutrality and inadequate public services provided by the government. This should be done while considering the fundamental characteristics of the socialist market economy with Chinese characteristics, particularly by adhering to the principle that “we must unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector.” 

By doing so, state-owned enterprises and private enterprises can achieve mutual complementarity and common development through fair competition. As for domestic and foreign opening up policies, we should gradually eliminate unequal market access opportunities and form a comprehensive open management system based on a negative list.  

Going forward, it is suggested to deepen monopoly industry policy reform. In terms of anti-unfair competition policies, efforts should be made to normalize anti-monopoly and anti-unfair competition supervision. Regarding industrial subsidy policies, we should regulate the coverage and rigidity of industrial subsidies in a reasonable manner. In terms of financial market development policies,the focus should be placed on improving the credit investigation system for SME financing and establishing a sound mechanism for compensating SMEs for financing risks. 

When constructing the service system for SMEs, policy support and government procurement efforts for SME service institutions should be increased. E-government platforms and intermediary organizations can play a crucial role in bridging the gap between the government and enterprises. Continuously optimizing the business environment should revolve around the construction of the rule of law, which lies at the core of fostering the healthy business ecosystem. 

In the future, we should further increase the transparency of government affairs and establish a sound system for assessing government and administrative commitments. As for the evaluation and incentive mechanisms for cadres, a cordial and clean relationship between the government and businesses that is compatible with high-quality development should be established. 

Indicators related to equitable development and fair competition of enterprises should be incorporated into their assessment system, and an integrated assessment and evaluation mechanism for provinces, cities, districts, and streets should be established. 

 

Luo Zhi is a profesor and director of the New Private Economy Research Center at Wuhan University.

Edited by ZHAO YUAN